The Securities and Futures Commission Files Criminal Complaint and Designates Audit for 'Revenue Manipulation' by Secure Letter

Regular Meeting Held and Resolved on the 11th
Deceiving External Auditors with Fake Documents

On the 11th, the Financial Services Commission's Securities and Futures Commission announced that at its 16th meeting, it resolved to take measures against the software development company SecureLetter for preparing and disclosing financial statements in violation of accounting standards, including prosecutorial referral and a three-year auditor designation.

The Securities and Futures Commission ordered a three-year auditor designation, a recommendation to dismiss the CEO and suspend duties for six months, a recommendation to dismiss the responsible executive and suspend duties for six months, and similar measures against the former head of the management support team. The company, CEO, and responsible executive were also reported to the prosecution and required to make related corrections.

Additionally, a fine of 40 million KRW was imposed on the CEO. The imposition of fines on the company and CEO will be finalized by the Financial Services Commission in the future.

SecureLetter, a KOSDAQ-listed company, falsely recorded sales of 599 million KRW in 2021, 894 million KRW in 2022, and 1.193 billion KRW as of the third quarter of 2023. The company inflated sales by issuing false tax invoices.

The falsely recorded performance was falsely stated in the securities registration statement. The securities registration statement submitted on June 30, 2023, contained financial statements for the 7th, 8th, and 9th first quarters that violated accounting standards.

The company also fabricated fake documents to obstruct the auditor's normal external audit. During the auditor's inventory inspection attendance, some inventory assets were concealed, and false documents such as sales-related inspection confirmation letters and construction reports requested by the auditor were fabricated and submitted.